VW shares plunge after Qatar sale

Volkswagen is Europe's biggest carmaker

Shares in Volkswagen have plunged 8% on news that Qatar's sovereign wealth fund plans to sell 25 million preference shares in the carmaker.

Qatar has built up a sizeable stake in VW and, despite the sale, said it was committed to investing in the company.

Earlier this year, it said it planned to become the third-biggest shareholder in what is Europe's largest carmaker.

Last month, Barclays shares were hit hard when Qatar sold £1.3bn worth of shares in the UK bank.

VW shares fell nine euros, or 8%, to 102 euros.

Analysts said Qatar's wealth fund was simply taking profits after a good return on its investment.

"Qatar is exhibiting exit strategies akin to a private equity fund that makes wise profits and knows when to cash in," said John Sfakianakis at Banque Saudi Fransi-Credit Agricole.

Earlier this year, VW agreed a deal to merge with German luxury sports carmaker Porsche by 2011.

Following the deal, the biggest shareholders will be the Porsche and Piech families and the German state of Lower Saxony.